CEO Column

What’s causing the bottleneck?



What’s causing the bottleneck?

United Kingdom 53.20%, United States 46.42%, Canada 43.36%, Germany 36.32%, Italy 30.46%, France 28.56%, and Japan 3.18%. These figures are none other than the percentages of people vaccinated in G7 countries (as of May 16). I was shocked to find Japan lagging so far behind other developed countries, a sentiment surely shared by many people throughout Japan. After all, Japan is supposed to be one of the world’s leading economic powers, supposedly with a first-rate healthcare system. Incidentally, not just among G7 countries, but even among other countries in Asia as well, Japan’s vaccination rate is abysmally low. Never mind China or South Korea, Japan doesn’t even match up to Indonesia or Bangladesh. This is unbelievable for a country about to host an international event like the Olympics that is expected to attract people from all over the world, but that is the state of affairs now laid bare for the international community to see.

Japan’s much maligned vaccinations rollout has made it the target of derision, with some labeling it a “vaccine loser,” but the root cause of the situation lies not in the country’s inability to obtain the vaccine, but in its handling of distribution to get as many people vaccinated as quickly as possible. So the bottleneck was not in obtaining supplies of the vaccine, but in getting it distributed. Perhaps the government realized this too late, or perhaps it was aware of it, but various barriers prevented a fast-tracked vaccination campaign. Who really knows? Either way, though, the failure to address the problem by identifying where is the source of the bottleneck may have been a fatal misstep. It’s true there is no use crying over spilt milk, and criticism alone is not constructive. Nevertheless, since Japan suffers neither a lack of funding nor an impoverished healthcare system, it is imperative that the country investigate the causes of this predicament, and I personally suspect that it will reveal that Japan is saddled with structural issues involving a complex web of factors including decision-making mechanisms, organizational structure, leadership, and also national character.

“Where is the bottleneck?” “What is there too much of, and what is there not enough of?”

That is this month’s theme. I have a habit of looking at things from this perspective. For example, when I hear about a popular high-class restaurant where it’s almost impossible to get a reservation, the thought comes to mind is that there are too many people willing to pay a fortune for tasty dining and not enough skilled chefs. I view things through the sort of lens as well when I see soaring prices on big-name luxury whisky or wine. And when there is a bull market for stocks or cryptocurrencies, the thought that comes to mind is that there must be an imbalance between a growing supply of money available for investment and not enough things to invest in. When reading the news coverage on the recent commotion over the global microchip shortage as well, I can’t help wondering who are the players in control at the source of the bottleneck?

I have also had this frame of mind in our company’s areas of business. In the past, customers looking for help with funerals or graves faced a bottleneck in efficient information gathering, and it occurred to me that using the internet to solve that bottleneck might lead to a viable business. When that bottleneck was eventually resolved, a new bottleneck emerged in the supply of customer-oriented service. I constantly remind myself, though, that resolving a bottleneck is no time to rest easy. Why? Because where there are big bottlenecks, there are also big business opportunities, but competitors will make inroads into such areas eventually, and a supply-demand gap will gradually disappear. Areas where that happens will become over-supplied and profit margins will wither away. Business will lose potential and sink into price war mode. I have always kept this sort of thing in mind.

Viewing Japanese society from that perspective enables us to identify bottlenecks in the proximity of our own business that need resolving. One such bottleneck is the growing area of end-of-life planning in the senior citizens community. Right now, there is a major bottleneck in end-of-life. While the growth in Japan’s senior citizen demographic and changes in family relationships drive growing demand year by year, there are almost no services available that provide efficient information gathering, a customer-oriented perspective, or address issues present across multiple areas. While there is an excess of user needs, there is an acute shortage of supply of relevant information or services.

Addressing this serious social challenge, i.e. resolving this bottleneck, is precisely our line of business, and our contribution to society. To reiterate, this sort of situation is déjà vu for us, and I believe we can proceed with confidence.

Hirotaka Shimizu
Chairman and CEO
Kamakura Shinsho, Ltd.